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WATER OPERATOR PARTNERSHIPS Utility Reform and the Struggle for Alternatives to Privatization

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WATER OPERATOR PARTNERSHIPS Utility Reform and the Struggle for Alternatives to Privatization WATER OPERATOR PARTNERSHIPS Utility Reform and the Struggle for Alternatives to Privatization by Andrea Karin Beck B.A., Political Science, Free University of Berlin (2012) M.A., International Peace and Security, King’s College London (2013) M.Sc., Integrated Water Resources Management (non-thesis), McGill University (2014) Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Sustainable Development at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY May 2020 © 2020 Andrea Karin Beck. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Author............................................................................................................................................................... Andrea Karin Beck, Department of Urban Studies and Planning May 13, 2020 Certified by....................................................................................................................................................... Professor Lawrence Susskind, Department of Urban Studies and Planning Dissertation Supervisor Accepted by...................................................................................................................................................... Associate Professor Jinhua Zhao, Department of Urban Studies and Planning Chair, Ph.D. Committee 2 WATER OPERATOR PARTNERSHIPS Utility Reform and the Struggle for Alternatives to Privatization by Andrea Karin Beck Submitted to the Department of Urban Studies and Planning on May 13, 2020 in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Sustainable Development Abstract The water privatizations that swept across the global South in the 1990s and early 2000s failed to meet expectations. Rather than bringing about increased efficiency and investment, a suite of public-private partnerships ended prematurely and caused social unrest, most notably in the Bolivian city of Cochabamba. In response, scholars and activists embarked on a search for “alternatives to privatization.” Informed by the work of the Municipal Services Project and postneoliberal scholarship, this dissertation examines Water Operator Partnerships (WOPs) as a potential alternative to private-sector engagement in water and sanitation. Relying on primary documents and interviews, I trace the WOP concept to its origins in the UN system and highlight its defining characteristics as a partnership type. I further discuss the struggles behind the concept’s emergence, focusing on the contested role of the private sector and the strategies applied by activists trying to safeguard a public orientation of WOPs. Based on two case studies of water companies in the Netherlands and Uganda, I examine the motivating factors that would cause water operators to engage in WOPs on a not-for-profit basis. My findings indicate that WOPs are driven by a number of interests that call into question their portrayal as solidarity-based partnerships, including staff development and the furthering of opportunities for aid, trade, and investment. I then follow the Dutch and Ugandan companies out of their headquarters and into the field, to the water utility serving Malawi’s capital Lilongwe. Drawing on fieldwork in Malawi, I examine two WOPs in detail, showing how and why these partnerships failed or succeeded in supporting the reduction of non-revenue water. Taken together, this dissertation points to a need to refocus the debate on WOPs, beyond the private sector and towards public water and sanitation operators. I argue that two trends in particular deserve critical attention: professionalization and corporatization. Both are somewhat more concealed and less visible than the outright inclusion of the private sector in WOPs, but they could, in the end, pose a more serious challenge to the WOP model and its postneoliberal potential. Dissertation Supervisor: Lawrence Susskind Title: Ford Professor of Urban and Environmental Planning 3 Dissertation Committee Lawrence Susskind Ford Professor of Urban and Environmental Planning Department of Urban Studies and Planning Massachusetts Institute of Technology James Wescoat Aga Khan Professor of Landscape Architecture and Geography Department of Architecture Massachusetts Institute of Technology Gabriella Carolini Associate Professor of International Development and Urban Planning Department of Urban Studies and Planning Massachusetts Institute of Technology 4 “Water reflects the world.” – Maja Lunde, The End of the Ocean 5 CONTENTS List of Figures 7 List of Tables 8 List of Abbreviations 9 Acknowledgments 11 Chapter 1 Introduction: Reforming Public Water Utilities in the Global South 13 Chapter 2 Water Operator Partnerships: Conceptual Origins and Global Governance 30 Chapter 3 From Radical Alternative to Mainstream Compromise: Pro-Public Struggles 51 Chapter 4 Between Solidarity and Self-Interest: Mentor Motivations 62 Chapter 5 Water Operator Partnerships in Lilongwe, Malawi: A Mentee Perspective 94 Chapter 6 Conclusion: Water, Public Alternatives, and Postneoliberalism 142 Appendix I Municipal Services Project: Partners 147 Appendix II List of Interviews 148 Appendix III GWOPA Guiding Principles 151 Appendix IV GWOPA Code of Conduct 152 Appendix V Malawi: Select Development Indicators 154 References 155 6 FIGURES 2.1 Sant Pau Art Nouveau Site, Barcelona 34 2.2 UN-Habitat Pavilion (Pavelló de Sant Leopold) 35 2.3 South-South and North-South WOPs 38 4.1 VEI Headquarters in a Former Vitens Building in Utrecht 68 5.1 LWB Vision 95 5.2 Kamuzu Dam I 97 5.3 Kamuzu Dam II: Commemorative Plaque 98 5.4 Kamuzu Reservoir 99 5.5 LWB Head Office, Area 3 100 5.6 LWB Supply Area 101 5.7 Water Kiosk in a Peri-Urban Area of Lilongwe, with Kiosk Attendant 105 5.8 Water Kiosk in a Peri-Urban Area of Lilongwe, Newly Constructed 106 5.9 Spatial Distribution of Water Kiosks in Lilongwe 107 5.10 Pressure-Reducing Valves 115 5.11 LWB: NRW Percentage (12-Month Average) 121 5.12 Team of Plumbers Replacing a Stuck Water Meter, Southern Zone 123 5.13 Disconnected Water Meters, Northern Zone Office 125 5.14 LWB Ad: Reporting Illegal Connections 137 7 TABLES 1.1 Spectrum of Private-Sector Participation in the Water Sector, from “Light” to “Deep” 15 1.2 PPP Projects in Water and Sewerage (1993-2003) 16 2.1 GWOPA Steering Committee Meetings (2009-2019) 32 2.2 Global WOP Congresses 36 2.3 WOP Configurations 37 2.4 WOP Typology 40 2.5 WOP Case Studies 42 4.1 VEI Shareholders and Affiliated Water Companies: Select Characteristics (2016) 69 4.2 Non-Affiliated Water Companies: Select Characteristics (2016) 69 4.3 VEI Staff Breakdown 70 4.4 WaterWorX WOPs 78 4.5 NWSC: Select Characteristics (2016/17) 83 4.6 NWSC: Select Key Performance Indicators 85 5.1 LWB: Select Characteristics (2015/16) 95 5.2 Population, Lilongwe City (1966-2018) 103 5.3 Population by Main Source of Drinking Water, Lilongwe City (2018) 104 5.4 WOP Tasks and Performance-Based Compensation 119 5.5 Nyasa Times Articles on Illegal Water Connections (2017-2019) 136 8 ABBREVIATIONS ADB Asian Development Bank AfWA African Water Association BEWOP Boosting Effectiveness of Water Operators’ Partnerships CSR Corporate Social Responsibility DAC Development Assistance Committee DMA District Metered Area EIB European Investment Bank EU European Union GWOPA Global WOP Alliance HIPC Heavily Indebted Poor Countries HLPW High-Level Panel on Water ICSID International Center for Settlement of Investment Disputes IDB Inter-American Development Bank IFIs International Financial Institutions ISC Integrity Sub-Committee IWA International Water Association JICA Japan International Cooperation Agency KMU Kiosk Management Unit KPI Key Performance Indicator LWB Lilongwe Water Board MDGs Millennium Development Goals MWK Malawi Kwacha NPM New Public Management NRW Non-Revenue Water NWSC National Water and Sewerage Corporation OECD Organization for Economic Co-operation and Development OFID OPEC Fund for International Development OPEC Organization of the Petroleum Exporting Countries PIP Performance Improvement Plan PPP Public-Private Partnership PSI Public Services International 9 PUP Public-Public Partnership RPM Resident Project Manager RPWN Reclaiming Public Water Network SC Steering Committee SDGs Sustainable Development Goals TNI Transnational Institute UN United Nations UNSGAB UN Secretary-General’s Advisory Board on Water and Sanitation VEI Vitens Evides International WALOPU Water Loss Prevention Unit WASH Water, Sanitation, and Hygiene WOP Water Operator Partnership WUA Water User Association 10 ACKNOWLEDGMENTS This dissertation is the product of a journey of learning and discovery. Many people have taught, guided, supported, and encouraged me along the way. First of all, I would like to thank my advisor, Larry Susskind, whose boundless energy drove me forward over five inspiring years in the Department of Urban Studies and Planning. Larry did not hold me back when I discovered that my interest in urban water services was even greater than my interest in transboundary water governance, and he gave me the time and space I needed to develop the dissertation I really wanted to write. Jim Wescoat offered invaluable guidance and provided a geography perspective on water that helped me find my “intellectual identity.” Gabriella Carolini has been a role model and a source of inspiration
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